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Evaluate whether technological change means that the wage gap between the skilled and unskilled will simply keep growing.

 


The idea of a wage gap is somewhat simplistic. It is undeniable that there is a gap in nominal terms between those who are not formally skilled and those with salaried jobs who hold professional qualifications. The development of the ‘precariat’ is something which tends to run against this idea. Many of those who are formally skilled are highly leveraged, and it is estimated, have so little in savings, and so much in housing, educational, and personal debt, that they are between one and two pay-days away from bankruptcy. Often, those who are skilled live in high-cost areas and rent, rather than own property, whereas some of those who are unskilled live in public housing or their family property with a much lower set of outgoings per month. In addition, many of those classed as unskilled are young, and are living with parents or relatives who can accommodate them.

It follows that a wage gap predicated upon technological change which pushes out those in service positions, or which replaces manual workers in warehouses and factories with robots, will result in more structural and regional unemployment for the formally unskilled. This is not a true picture, though. Technological change can also produce lower cost products, such as cheaper banking and power apps, which affect those at the bottom of the scale more than the middle or top. ‘Glocalisation’ in whch manufacturing jobs return to countries which had previously outsourced them, similarly boosts the working people if those people can maintain a higher opportunity cost for capital, either through unions or gaining skills in the workplace or professional courses. Changes in restaurants which allow for fewer staff make cheap food cheaper by lowering costs, changes in supermarkets which encourage online purchasing mean more work for shelf-stackers.

Alongside these developments, governments have encouraged the development of employment protections, the limitation but not elimination of zero hours contracts (which have some benefits for supplemental income) and national living wages, as well as programmes like furlough and state employment and stimulus schemes. These have benefitted the poor and unskilled more than the skilled.

On the other hand, the nominally skilled have seen, as noted, vast increases in education costs, debt, housing, and food prices. The development of artificial intelligence threatens sectors previously dependent on learned and difficult skills, like legal property conveyancing, accounting, and medicine, by enhancing the less skilled or displacing the skilled. Professional barriers, for instance between doctors, nurses, and pharmacists, or legal executives and solicitors, or construction foremen and junior architects, are in those circumstances breaking down. Jobs are being shed in the financial industry.

‘Skills’ therefore take on a different quality. Life skills, manual skills, and the capacity to learn and re-learn through practical experience and courses, are beginning to be of greater value than professional skills learned through degrees and professional validation. Technology—not least in terms of transport, commuting, and apps—is lowering prices, improving access, and reducing the return to graduates whilst boosting those who can save, develop multiple income streams, or rely upon family and local communities. The gap between the formally skilled and the ‘unskilled’ is therefore not guaranteed to widen.

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